POSCO buys Daewoo International for $2.8 billion

POSCO on Monday signed a deal to acquire Daewoo International Corp. as the world’s fourth largest steelmaker seeks to diversify its businesses and secure stable sources for raw materials.

The contract was signed by POSCO and Korea Asset Management Corp., representative of Daewoo International stakeholders, and calls for the steelmaker to make the payment by the end of September.

Under the contract, POSCO will acquire about 68 percent of Daewoo International or 68.68 million shares, for 3.37 trillion won ($2.8 billion), 87.8 billion won less than the steelmaker’s initial offer of 3.46 trillion won.

The final amount equates to roughly 49,100 won per share. Daewoo International closed at 32,300 won on Monday, up 0.94 percent from Friday. The highest closing price of Daewoo International shares seen this year is 38,650 won on Jan. 21.

At the end of last year, Daewoo International’s paid in capital stood at 489 billion won. For last year, the company’s revenues came in at 11.1 trillion won while its operating and net profits were recorded respectively at 171 billion won and 125 billion won.